International Business Strategy Report 2022

RUNNINGHEAD: INTERNATIONAL BUSINESS STRATEGY
INTERNATIONAL BUSINESS STRATEGY
Name of the Student:
Name of the University:
Author’s Note:

1INTERNATIONAL BUSINESS STRATEGY
Executive summary
This report will analyse the international business strategy for the Adidas Company. This organisation is interested
to expand its business in Japan. The mission of this report is to identify the most appropriate business strategy for
this company. The market of Japan will be analysed in this report. The market entry strategy, financing strategy,
staffing strategy will be analysed which will be helpful for this company to do its business in Japan.

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Table of Contents
Introduction:..................................................................................................................................................................3
SWOT and industry analysis:.......................................................................................................................................3
Background of Adidas Company:.............................................................................................................................3
Background analysis:................................................................................................................................................3
Internal analysis:...................................................................................................................................................3
External analysis:..................................................................................................................................................4
Porter’s five forces analysis:.................................................................................................................................4
SWOT analysis:....................................................................................................................................................5
Strategic goals and Tactics:..........................................................................................................................................6
Market selection:.......................................................................................................................................................6
Pest analysis:.........................................................................................................................................................6
Market entry:.............................................................................................................................................................7
Product and pricing strategy:....................................................................................................................................8
Competitive dynamics:.............................................................................................................................................8
Staffing &Professional development:.......................................................................................................................8
Financing international operation:................................................................................................................................9
Expected results:.........................................................................................................................................................10
Conclusion:.................................................................................................................................................................10
References:..................................................................................................................................................................11

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Introduction:
The business development plan is necessary for a business organisation to boost the relationship between
the buyers, suppliers and competitors. This report aims to develop an international business strategy for the Adidas
Company. To develop the international business strategy for Adidas, SWOT analysis, Porter’s five forces analysis,
and other strategic management theories will be used in this report.
SWOT and industry analysis:
Background of Adidas Company:
Adidas, a multinational business organisation headquartered in Herzogenaurach, Germany, offers sports
accessories. Kasper Rorsted is the present CEO of this company (Adidas group, 2020). The mission of Adidas is to
become the global leader in the sports goods industry. To improve competitive position this organisation is
strengthening its brands and products (Adidas group, 2020). The vision of Adidas is to become the design leaders
and deliver the best quality products in the global sports market. In 2019, net sales of this company were 23.64
billion euros (Statista, 2020). The total number of employees of Adidas in 2019 was 59,533 (O'Connell, 2020).
This organisation manufactures sports accessories, shoes and clothing.
Background analysis:
Internal analysis:
In this part, tangible and intangible assets of this organisation will be identified. The brand value of Adidas
in 2019b was 16.6 billion US dollars (Statista, 2020). The two main manufactories of this company are located in
Vietnam and China. For mass production, this organisation uses CNC machines. Software is used by this company
for creating cutting edge shoes. R&D of this company is efficient. The brand reputation and organisational value of
this company is its strength. The number of employees working for this company are 59533 in 2019 (O'Connell,
2020). The R&D of this company is creating innovative technology to ensure smooth manufacturing. Partnerships,
patents, sponsorships of this company and cooperation with universities are the intangible assets of this company.
Supply chain management and value chain of this company are strengths for the Adidas Company.

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External analysis:
Industry based factors Institution-based factors
This organisation is successful to control its global
business with the help of internet and innovative
technology, developed by the R&D of this company.
This company do its global business successfully. So it
can be said that this organisation strictly follow the
corporate law of the home country.
This organisation can fulfil customer preference. Based
on the local market demand, this company delivers
customised products.
This company can maintain its supply chain
management. By utilising the trade facilities this
company enhances its market share.
This organisation has to do its business in an intensely
competitive market. Competitors of this company are
Nike, Asics, Puma and others (Ranjan, 2016).
This company prioritises innovative ideas for business
and utilises its assets to capture the market.
Porter’s five forces analysis:
Threats of new entrants The threat of new entrants is low because for a new business
organisation it is difficult to invest a huge amount of money in the
R&D department. For promotion purpose, this company invest a
huge amount of money. The new entrants have to overcome several
barriers to market entry.
Bargaining power of suppliers Bargaining power of suppliers for this company is low because of
the brand power of this company. The suppliers of this company are
situated throughout the world. This company single headedly
manages the multi-layered supply chain and several types of
suppliers throughout the world.
Bargaining power of customers The bargaining power of the customer for this company is low

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because of its loyal customer base. Though for the customers there
are certain opportunities like Nike, Puma and Asics and other
companies yet it can be said that due to loyal customer base the
bargaining power of customer for this company is moderate (Mahdi
et al., 2015)
The threat of substitute products The threat of substitute product for this company is moderate. This
organisation provides products not only for high-end customers but
also for low-end customers. To compete with local products this
organisation offers the best quality product at a low cost.
The intensity of rivalry among
competitors
The intensity of rivalry among competitors factor is high for this
company. Competitors of this company like Nike, Puma, and Asics
are offering the best quality products in the international market.
However, this organisation is successful to manage its global
business in the competitive market.
SWOT analysis:
Orde
r
STRENGTHS WEAKNESSES
1 Brand value and brand reputation of this
company.
Operating expenses are enhancing.
2 New product innovation of this company. Outsourced manufacturing is a weakness for this
company.
3 Effective supply chain management Few endorsements is a weakness of this company.
Orde
r
OPPORTUNITIES THREATS

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1 The sportswear industry is flourishing in
the 21st century.
This company has to face intense competition from its
competitors like Nike, Puma, Asics and other business
organisations.
2 E-commerce is one of the best platforms
for this company to enhance market share.
Counterfeit product is a threat to this company.
3 Investing in technological development is
an opportunity for this company
Regulatory pressures are the threat to the global business
of Adidas Company.
Strategic goals and Tactics:
Market selection:
This company is interested to expand its business in Japan within 12 months. Justification for choosing this
country will be provided in this part. The internal and external factors of Japan will be discussed through PEST
analysis.
Where to enter?  This company has to ensure the model focus on strategic goals. As this company will
enter by following the fast mover strategy.
Pest analysis:
Political factors  Constitutional monarchy is followed in this country (BBC News, 2020).
 Politically stable country.
 The prime minister led cabinet has the executive power to control this country (BBC
News, 2020).
 Tokyo s the capital of this country.
Economic
factors
 The third-largest economy of this world with a total GDP OF $4.9 trillion in 2017.
 The second-largest economy of Asia (Data.worldbank.org, 2020).

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 Economically stable country.
 The mixed economic system is followed in this country(Data.worldbank.org, 2020).
 To do business in this country, a company has to pay four types of taxes which are
corporate tax, enterprise tax, corporate inhabitant tax, and special local corporate tax.
Social factors  Two major religions of this country are Shintoism and Buddhism (BBC News,
2020).
 Japanese is the most used language (BBC News, 2020).
 An ageing population and decreasing birth-rate are the problems of this country
(Tsutsui, 2020).
 To do business successfully in this country, the management team of Adidas has to
closely analyse the environmental factor of this country.
Technical
factors
 One of the most technically improved countries in this world.
 The people of this country are interested to learn and use new technologies.
 To manage the problem of the ageing population and decreasing birth-rate, this
country has been improving its technological innovation and creativity.
Market entry:
When to enter? Ad a fast mover, this company can enter the market of Japan. It will help this company to
gain the competitive advantage of the market of Japan.
How to enter? This organisation can follow equity modes to enter in Japan. This company can follow large
scale entry because it will help this company to get the benefits of demand acquisition, scale
economics and switching costs (Hollender, Zapkau & Schwens, 2017). This company can
follow the vertical entry mode (Schellenberg, Harker & Jafari, 2018).

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Product and pricing strategy:
Pressure for cost reduction:  Though the people of Japan prefer local products yet it can be said that
this company can utilise its brand reputation to capture the market of
Japan.
 Though this company will follow a fast mover strategy yet it can be said
that this company has to face intense competition in the market of Japan.
Pressure for global
integration
 Due to the environment-related issues this company has to provide
environment-friendly products. This organisation has to follow the
localization strategy.
 The formal and informal institution of Japan can be supportive towards
this company.
This organisation has to follow the localization strategy to attract the potential customer of Japan. To fulfil
the specific needs of the Japanese customers this company has to follow this strategy (Ghauri et al., 2016).
Japanese people prefer local products. That is the reason this company has to follow this strategy. To attract the
potential customer of this country, the official of this company will deliver an appropriate product which aligns the
culture and heritage of this country.
Competitive dynamics:
Between competition and collusion, this company has to follow the collusion method to enhance the profit
(Chen & Miller, 2015). When the competitor of this company attack the business organisation, to defend the
business the management of a business organisation has start counter-attack. With the help of brand value, brand
reputation this company can manage the pressure of competition.
Staffing &Professional development:
To gain competitive advantage, this company has to recruit the most eligible candidate as an employee. By
providing appropriate training and development program, the official of Adidas Company can make an efficient

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human resource. It can be recommended that the Adidas Company has to follow the localization strategy. In this
strategy, the geographic area will be prioritised. Based on the local culture, heritage, and customer demand this
company will offer products, which can attract the potential customer.
It can be recommended that this company can follow a polycentric staffing method. This method will allow
this company to manage the business appropriately (Guo, Rammal & Dowling, 2016). Parent company nationals
will manage the key headquarter position and host-country nationals manage the subsidiaries.
Financing international operation:
For financing international operation, this company can use debt financing method. In this method, the
officials of this company will take the loan for the international business and payback at a fixed time with interest
(Yazdanfar & Öhman, 2015). This method can be beneficial for the Adidas Company. This organisation has the
financial ability to pay back the money at the right time with interest. Though debt financing is riskier than equity
financing yet it can be said that this method will allow this company to control the business appropriately.
Strategy Activity Cost Team(s) responsible
Marketing Social media $20,000 PR team
Marketing Official website $6,000 Marketing team
Client/customer service Training and development
program
$20,000 Sales and customer
development management
Total amount: $46,000
To attract the potential customer of this country this company has to invest in social media marketing.
Facebook, Instagram, YouTube and other social media platforms will be handled by the PR team of this company.
The marketing team of this company will handle the official website of this company. However, this company has
to spend $20,000 for customer service improvement. It will help this company to deliver the best customer
satisfaction.

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Expected results:
As a leading business organisation of this world, the officials of this company are expecting that the
initiatives taken by this company will be successful to capture the market share of Japan. Whether the initiatives
taken by this company to capture the market of Japan are adequate or not will be closely monitored by this
company. It will help this company to identify areas which need modification. With the help of innovative
technologies and software, this company will monitor the entire procedure. Besides that, this company must
achieve competitive advantages.
Conclusion:
Thus, this report concludes that this organisation has to utilise its strengths to capture the market of Japan.
As a fast mover, this company will enter the market of Japan with the help of debt financing. Localization strategy
will be followed by this company. To attract the potential customer of Japan, this company will deliver products,
which are created by focusing on Japanese culture and heritage. For the staffing procedure, this company will
follow the polycentric approach.

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References:
Adidas group. (2020). HISTORY. Retrieved from https://www.adidas-group.com/en/group/history/.
BBC News. (2020). Japan country profile. Retrieved 5 April 2020, from https://www.bbc.com/news/world-asia-
pacific-14918801
Chen, M. J., & Miller, D. (2015). Reconceptualizing competitive dynamics: A multidimensional
framework. Strategic management journal, 36(5), 758-775.
Data.worldbank.org. (2020). Japan | Data. Retrieved 5 April 2020, from https://data.worldbank.org/country/japan?
view=chart
Ghauri, P., Wang, F., Elg, U., & Rosendo-Ríos, V. (2016). Market driving strategies: Beyond localization. Journal
of Business Research, 69(12), 5682-5693.
Guo, Y., Rammal, H. G., & Dowling, P. J. (2016). Global talent management and staffing in MNEs: An
introduction to the edited volume of international business and management.
Hollender, L., Zapkau, F. B., & Schwens, C. (2017). SME foreign market entry mode choice and foreign venture
performance: The moderating effect of international experience and product adaptation. International Business
Review, 26(2), 250-263.
Mahdi, H. A. A., Abbas, M., Mazar, T. I., & George, S. (2015). A Comparative Analysis of Strategies and
Business Models of Nike, Inc. and Adidas Group with special reference to Competitive Advantage in the
context of a Dynamic and Competitive Environment. International Journal of Business Management and
Economic Research, 6(3), 167-177.
O'Connell, L. (2020). Number of employees of the adidas Group worldwide 2000-2019 | Statista. Retrieved 5 April
2020, from https://www.statista.com/statistics/268427/number-of-employees-of-the-adidas-group-worldwide-
since-2000/

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Ranjan, W. (2016). A study of analysing strategic changers and organisation environment in adidas inc
organization.
Schellenberg, M., Harker, M. J., & Jafari, A. (2018). International market entry mode–a systematic literature
review. Journal of Strategic Marketing, 26(7), 601-627.
Statista. (2020). The adidas Group's net sales worldwide 2000-2019 | Statista. Retrieved 5 April 2020, from
https://www.statista.com/statistics/268416/net-sales-of-the-adidas-group-worldwide-since-2000/
Tsutsui, J. (2020). Factors Influencing the Fertility Decline in Japan. In Work and Family in Japanese Society (pp.
13-22). Springer, Singapore.
Yazdanfar, D., & Öhman, P. (2015). Debt financing and firm performance: an empirical study based on Swedish
data. The Journal of Risk Finance.